E-commerce is booming as customers increasingly demand the convenience of buying online and having their parcels delivered. But there's no escaping that delivering all those orders comes with a cost to the environment. The transportation, warehousing, and distribution of goods significantly contribute to global carbon emissions.
The good news is that businesses can reduce their carbon footprint by adopting sustainable logistics and contributing to the global effort to mitigate climate change. Besides the benefits to the environment, there are solid benefits to businesses, too, such as cost savings and improved operational efficiency.
This article will discuss specific ways businesses can reduce the carbon footprint of their deliveries. We’ll also examine how businesses in Europe are tackling these challenges. Finally, we’ll discuss how Delivery Solutions can help you provide a sustainable delivery service.
What is sustainable e-commerce and logistics?
Sustainable e-commerce requires eco-friendly solutions at every step of the business process. This includes how products are made, how they're packaged, and how they're delivered. To support global efforts to fight climate change, businesses must find ways to reduce waste, be more energy efficient, and use more environmentally friendly materials.
Transporting goods to consumers can contribute significantly to the carbon footprint of a product. So, companies can go a long way to make their products more sustainable by reducing the environmental impact of deliveries, such as planning efficient delivery routes and choosing vehicles that use less fuel.
The challenges of sustainable logistics
Transitioning to sustainable logistics involves many challenges, each requiring careful strategic planning. These are a few of those challenges:
High upfront costs: Investing in eco-friendly solutions like electric vehicles and renewable energy can be expensive. These initial costs can sometimes deter businesses from making green upgrades.
Complexity of adopting green practices: The adoption of green practices often means businesses need to review their current systems, and make significant changes. This can be both complex and demanding in terms of time and resources.
Limited availability of sustainable materials: There's a growing demand for the materials necessary for green technology, such as lithium for EVs. Often, this demand outstrips supply, leading to problems sourcing the necessary materials.
Consumer demand for fast shipping: The expectation for quick deliveries can clash with the processes necessary for green logistics. This can create a challenge in meeting customer expectations while remaining eco-friendly.
Investment in training and development: Educating staff on sustainable practices and technologies is essential for successful implementation but needs investment in time and costs.
Lack of infrastructure and support networks: Businesses, governments, and communities must establish a robust infrastructure, including charging stations and recycling facilities, before they can fully embrace green technology.
Scaling logistics: It’s challenging to expand sustainable logistics across global supply chains while maintaining consistency.
Balancing cost with sustainable practices: Businesses need to find a balance between the initial added costs of sustainable logistics and maintaining profitability.
Accurate reporting on sustainability performance: Accurately measuring and reporting environmental impact can be complex because of diverse standards and guidelines. There's also an increasing demand for transparency from stakeholders, so businesses must provide reporting that's detailed, accurate, and accessible.
Complying and adapting to environmental regulations: Environmental laws and standards are ever-evolving, and staying abreast of any changes means businesses must be adaptable.
Dependency on suppliers and partners: There's a further layer of complication because of companies' dependency on the cooperation of all their partners in the supply chain.
The benefits of sustainable logistics
Sustainability not only provides benefits to the planet but is also beneficial to business. Consumers are increasingly aware of the value of sustainability and are making more environmentally friendly choices. Sustainable choices often save on costs for the business, too. These are a few of those benefits:
- Reduced environmental impact
- Cost savings from increased efficiency
- Improved brand reputation and customer loyalty
- Increased regulatory compliance and reduced risk of fines
- Access to new customers who prioritize sustainability — 63% of customers say sustainable delivery is important to them
- Improved supply chain resilience
- Competitive advantage — European research found that 62% of logistics companies have won new customers as a result of strong sustainability practices
- Attracting employees who value sustainability
- Improved long-term financial performance and shareholder value
How logistics is shifting toward more sustainable solutions
Sustainable logistics is a major factor within the broader movement of the shift towards sustainable e-commerce. Advancements in technology, such as drones, electric vehicles, and advanced analytics, are at the forefront of this change, offering new ways to reduce the supply chain's carbon footprint. As well as their ability to offer sustainable solutions, these technologies help streamline operations, reduce costs, and improve the customer experience.
Drone delivery
Drone delivery is emerging as a key player in reducing carbon emissions within the logistics sector. Drones offer a cleaner, more energy-efficient alternative by replacing traditional delivery vehicles.
Unlike trucks and vans that rely on fossil fuels, drones typically use electricity from renewable energy sources. As a result, the use of drones has the potential to greatly impact the carbon footprint associated with delivering goods. This is especially significant for last-mile deliveries, where emissions are at their highest.
It's likely that in the future, as drone technology advances, businesses will use drones to handle a larger volume of deliveries. This is particularly welcome for urban areas, where reducing traffic congestion and pollution is even more of a concern.
The market for delivery drones is increasing rapidly and is expected to rise at a CAGR of 42.6% from 2023 to 2030. This surge in demand is largely fueled by consumer demand for quick, sometimes same-day delivery of goods.
Drones can provide fast delivery without the carbon footprint of ground transportation and offer a sustainable solution that meets consumer demand.
Electric vehicles (EVs)
Electric vehicles (EVs) are another cleaner alternative to conventional transportation. They typically run on electricity from renewable sources and help lower the carbon footprint of logistics operations.
Although EVs initially cost more than traditional vehicles, they have lower operating costs and bring financial benefits in the long run. They need less maintenance, and the electricity used to power them costs less than gasoline or diesel. Because of this, savings can be substantial over the vehicle's lifetime, making EVs a cost-effective option for businesses.
Consumers are increasingly concerned about the environmental impact of their purchases. Like drones, EVs can help meet customer demands for more environmentally friendly products and delivery. Businesses can improve their brand image by converting to EVs for their delivery fleets and appealing to a growing consumer sector.
So, EVs offer environmental and economic benefits to your brand reputation. As technology advances and the infrastructure for electric vehicles expands, it’s likely that the transition to EVs will become more widespread.
Data transparency
Businesses can show they're serious about reducing their carbon footprint by openly sharing information about their environmental impact. This openness helps in two main ways.
Firstly, it means the business can see exactly where their biggest environmental impacts are, which makes it easier to find ways to reduce them. For example, if their data shows a large percentage of their emissions are coming from last-mile delivery, they can switch to cleaner last-mile options like electric vehicles.
Secondly, being open about environmental efforts meets a growing demand from customers. Consumers want to buy from businesses that are making real efforts to reduce their environmental impact.
By sharing sustainability data, businesses allow customers to make more informed choices and support those making a difference.
In addition, by using data to track and improve their environmental footprint, businesses can save costs by reducing waste and using less energy.
So, being open and honest about how your business is working towards sustainability helps in many ways. It's good for the planet, meets customer expectations for green practices, and can help your business save money.
The European perspective
The European Union has set a target of becoming climate-neutral by 2050 and reducing greenhouse gas emissions by at least 55% by 2030. To help meet these targets, Germany, Italy, and France have implemented their policies.
Germany
"Energiewende" is Germany's policy to make the country's economy more sustainable by moving toward renewable energy sources such as wind, photovoltaics, and hydroelectricity. The drive would also include a move towards greener logistics.
One of Energiewende's initiatives is the electrification of transport and the use of EVs. Logistics operators are also exploring sustainable fuel alternatives for heavy-duty transport vehicles that can't yet be electrified.
More renewable energy is also playing a key role in logistics facilities. Solar, wind, or other renewable sources power an increasing number of warehouses and distribution centers.
Lastly, Germany has been exploring and researching energy-efficient technologies, such as using drones for last-mile delivery to further minimize the environmental impact of logistics.
Germany's strategy shows how integrating sustainability into logistics can benefit the environment and simultaneously future-proof the logistics sector.
Deutsche Post and DHL
Deutsche Post and DHL is one of the world's largest logistics companies, headquartered in Bonn, Germany. Deutsche Post is the postal division, and DHL is the parcel division. They aim to offer a comprehensive portfolio of green products and solutions for their logistics operations. Delivery is carbon-free in over 50% of their districts, and they predict that this will rise to 70% by 2025. Deutsche Post and DHL deploy more carbon-free delivery vehicles and operating equipment than any European delivery company.
Some of the ways they achieve greener logistics processes include:
Offsetting: Transport emissions from the delivery of parcels and letters are automatically offset by investing in global climate protection projects.
Biogas and electric trucks: Pilot studies are taking place throughout Germany to reduce emissions through biogas and electric trucks.
Green delivery centers: Sites are equipped with photovoltaics, heat pumps, building automation, and eco-friendly equipment, and they already use 95% green electricity. They have 100 carbon-neutral delivery centers presently in operation, aiming to increase to 280 by 2025.
Electric vehicles: Deutsche Post and DHL have the world's largest e-fleet, including electric trucks, electric delivery vans, e-trikes, and e-bikes, and they aim to continue investing in the expansion of their e-fleet.
Italy
Italy's plan for creating a more sustainable economy is its National Integrated Plan for Energy and Climate.
This plan sets ambitious plans to increase the use of renewables, improve energy efficiency, and cut greenhouse emissions.
One of the key factors in the plan is the electrification of transport. Because of this, Italy is reducing the carbon footprint of its logistics sector by increasing the number of electric delivery vehicles, such as electric vans and cargo bikes. More urban distribution centers further support the Italian initiative, making deliveries more efficient and less polluting.
Another innovative aspect of Italy's plan is encouraging rail and maritime transport over road transport, helping to reduce emissions and traffic congestion.
Plans also include other ways of greening the logistics chain, such as route optimization, information, and communication technologies.
Poste Italiane
Poste Italiane is the largest logistics operator in Italy. Its goal is to achieve carbon neutrality by 2030. Some of the ways it aims to reach this target are:
Replacement of petrol fleet: A €100 million loan from the European Investment Bank has enabled Poste Italiane to replace its petrol fleet with zero-emission tricycles and vehicles and all the necessary charging stations.
The use of IT: Post Italiane has adopted logistics software to optimize delivery routes. This software considers traffic density, the distance to cover, the type of road, traffic restrictions, and parcel volume. Suggested routes integrate electric vehicles' range limits and charging station availability.
France
France plans to significantly reduce its carbon footprint with its Energy Transition for Green Growth Act. This act aims to increase renewable energy production, slash greenhouse gas emissions, and reduce fossil fuel use by 30% by 2030.
Central to this policy is the use of electric vehicles. The introduction of these vehicles, together with urban distribution centers and cargo bikes, is transforming urban logistics, making it cleaner and more efficient.
Like Italy, France encourages shifting from road transport to more sustainable options like rail and waterways to reduce emissions and relieve traffic congestion.
They're also implementing ways to maximize the efficiency of logistic operations. This includes route optimization, telematics and logistics software, collaborative transport, and consolidated deliveries.
On top of this, France is making it financially attractive for companies to invest in sustainability by offering incentives for businesses that adopt sustainable practices.
Amazon in Paris
Two-thirds of Amazon deliveries in Paris now have zero-emission last-mile deliveries. Amazon has achieved this using a fleet of e-vans, bikes, and foot deliveries. Also, by setting up distribution micro-hubs across the city, they've dramatically reduced travel distances from the distribution centers to the customer.
These initiatives have been so successful Amazon plans to introduce similar initiatives across the whole of France.
How Delivery Solutions supports sustainable logistics
Delivery Solutions offers many features and options to help you provide more sustainable deliveries. These include:
A wide choice of carriers: Delivery solutions partners with a wide network of carriers. This means you can find one that provides the best solution for any circumstance and aligns with your environmental aims.
A choice of delivery: There are many types of delivery options, and the more options you have, the easier it is to meet your sustainability goals. These delivery options include:
- Carriers using eco-friendly practices such as electric vehicles and bike deliveries.
- Buy online, pick up in store (BOPIS). The shorter distances, predictable routes, and better accessibility involved with BOPIS make last-mile delivery simpler, cheaper, and greener.
- Secure lockers, where customers can pick up their delivery at their own convenience. Customers often combine their trip to pick up their package with another trip, thus saving more on emissions. It also means that carriers can do multiple drops to one site.
- Curbside pickup is another option. Geofencing capabilities also provide the store team with notifications when the customer arrives, which limits the problem of idling engines at the curbside.
Eco-friendly returns: Delivery Solutions offers many options for eco-friendly returns, such as
- Consolidated returns
- Return to store
- Send to a resale outlet or donation center
- Enable the customer to keep the item
Data analysis of past performance: Machine learning analyzes the past performance of carriers and their carbon emissions, providing you with information to choose the most eco-friendly option. Delivery Solutions also provides information about the carbon savings of each delivery for both the customer and retailer.
It's easy to switch: It's easy to switch providers to choose the most efficient and eco-friendly option.
Improved efficiency: The Delivery Solutions platform makes it easy to coordinate and manage deliveries, leading to greater efficiencies. This, in turn, saves on carbon emissions.
A greener future for e-commerce and logistics
Prioritizing the carbon footprint of e-commerce and logistics is essential to future-proof business and support global efforts to fight climate change. Businesses can make an important positive impact on these efforts by embracing sustainable policies such as those outlined above. As we've seen, greener solutions benefit businesses, consumers, and the planet.
Delivery Solutions' platform provides many options to help your business play its part in a more sustainable future for e-commerce and logistics.
To find out more, book a demo today.
Topics from this blog: Delivery Innovation Improvement